Executive Summary

Algeria awards universal service licences to extend telecom services

Algeria’s fixed-line penetration was in decline for a number of years before the trend was reversed in 2015. This recovery is likely to continue to the end of the decade as infrastructure is extended to hitherto underserved areas as part of the Universal Service Telecommunications (UTS) program. Three Universal Service Telecommunications licences were awarded in early 2016, with licensees obliged to provide fixed and wireless telecoms services to all communities.

The country’s relatively well developed infrastructure includes a national fibre backbone which is being augmented with a new subsea link to Valencia (expected to be ready for service in February 2017), as well as a new 4,500km terrestrial Trans-Saharan Backbone network to which Algeria became a partner in September 2016.

Mobile penetration stands at about 108%, which is relatively low by regional standards. The regulator was slow to issue 3G licences, while LTE were not awarded until May 2016. By the following September all three licensed mobile network operators had launched LTE services. Coverage obligations, together with investments made in the intervening months, suggest that LTE will be extended rapidly in coming years, and will go far to delivering mobile broadband to rural areas as per the UTS program.

The market has begun to recover from the social and political unrest which erupted in 2011. Investor confidence has been revived by recent moves from the government to sell a stake in the country’s leading mobile operator, Mobilis.

Development of Algeria’s fixed-line broadband market has long been hampered by the limited reach of the fixed-line network and the capability of the infrastructure to provide broadband services. This created an environment which encouraged alternative operators to invest in fixed-wireless accesses. The licensing of 3G spectrum in late 2013 and the provision of LTE more recently has done much to ensure the availability of mobile internet access across the country.

Improved international connectivity has substantially reduced the cost of broadband services in recent years. Algerie Telecom continues to invest to expand its national fibre infrastructure, while the government has committed funds towards its national broadband program despite declining revenue from the falling price of oil which has put pressure on its overall investments.

This report provides an overview of Algeria’s telecom sector, including the fixed-line, mobile and broadband markets. It assesses recent spectrum licensing and the implications for mobile broadband availability, profiles the major operators and assesses their operating and financial performances. In addition it covers the efforts by the government and regulator to improve infrastructure generally and to extend telecom services to rural areas of the country. It also provides mobile and broadband scenario forecasts to 2021.

Key developments:

Government revises plans to restructure Algerie Telecom and sell a stake to investors;

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